Workforce Skills and SME Competitiveness in Indonesia: The Mediating Role of Digital Adoption Depth

R Rina Novianty Ariawaty; R Rita Avianty

doi:10.32535/ijabim.v10i3.4814

Workforce Skills and SME Competitiveness in Indonesia: The Mediating Role of Digital Adoption Depth

R Rina Novianty Ariawaty, R Rita Avianty

Abstract

Digital adoption may generate different competitive value across SMEs depending on how deeply technologies are integrated into business functions. This study examines the relationship between workforce skills and SME competitiveness in Indonesia and the mediating role of digital adoption depth. A cross-sectional survey of 100 SME owners across six Indonesian provinces was analysed using partial least squares structural equation modelling (PLS-SEM). Workforce skills comprised digital proficiency, problem-solving ability, adaptability, and managerial competence, while digital adoption depth reflected technology integration across business functions. Results showed that workforce skills were positively associated with digital adoption depth (? = .312) and SME competitiveness (? = .262). Digital adoption depth had the strongest relationship with competitiveness (? = .450) and significantly mediated the relationship between workforce skills and competitiveness (? = .140), indicating complementary mediation. The model explained 34.5% of competitiveness variance. These findings highlight the importance of combining workforce development with deeper digital integration to strengthen SME competitiveness.

Keywords

Workforce Skills; Digital Adoption Depth; SME Competitiveness; Small and Medium-Sized Enterprises; Indonesia

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DOI: https://doi.org/10.32535/ijabim.v10i3.4814